25.2 President hoover’s response  (Page 8/10)

Hoover formed the Reconstruction Finance Corporation (RFC) in 1932. This represented a significant effort, although it did not provide any direct aid to needy Americans. The RFC set aside $2 billion in taxpayer money to rescue banks, credit unions, and insurance companies, hoping to promote Americans’ confidence in financial institutions. However, by lending money only to banks with sufficient collateral, he ensured that most of the recipients of the aid were large banks. Additionally, most Americans at this time did not have assets to place into banks, however confident they may have felt. In 1932, Hoover also endorsed the Emergency Relief and Construction Act, which allotted $1.5 billion to states to fund local public works projects. Hoover’s limitations upon the types of projects that could receive funding and the types of workers who could participate, however, limited the program’s utility.